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Asia-Pacific Economic Cooperation (APEC)

Fact sheet prepared by the Bureau of East Asian and Pacific Affairs.

The Asia-Pacific region, comprising some of the most dynamic economies in the world, has experienced unprecedented growth in the last two decades. Economic relations among economies of the region also have increased dramatically, fueled by growing trade and financial flows.

Asia-Pacific Economic Cooperation (APEC) was established in 1989 to promote economic integration in the Pacific region and to sustain economic growth. Originally, APEC was an informal group of 12 Asia-Pacific economies. In November 1991, APEC admitted China, Hong Kong, and Chinese Taipei. In November 1993, Mexico and Papua New Guinea joined. Chile joined in November 1994, bringing membership to 18.

APEC provides a forum for discussing a broad range of important regional economic issues. The APEC chair rotates annually among members and is responsible for hosting the annual ministerial meeting. Foreign and economic ministers from the members first met in Canberra, Australia, in November 1989. Since then, annual ministerial meetings have been held in Singapore, Seoul, Bangkok, Seattle, Jakarta, and Osaka. Upcoming ministerial meetings will be held in the Philippines (1996), Canada (1997), Malaysia (1998), and New Zealand (1999). The Philippines has been the host to periodic meetings throughout this year to lay the groundwork for the ministerial meeting in November.

U.S.-APEC Relations

The United States works closely with members of APEC, which is an important part of U.S. engagement in the Asia-Pacific region. President Clinton has underscored that the United States is "committed to making [APEC] a vehicle for liberalization in the region."

In 1995, U.S. trade with APEC economies was $884 billion, or about 66% of total U.S. trade with the world. Europe, by comparison, accounted for less than 22% of total U.S. trade during that period.

APEC Progress

APEC has grown from an informal dialogue group to a more formalized institution that involves all major economies of the region. In Seattle during the APEC Ministerial Meeting in 1993, ministers agreed to the Declaration on an APEC Trade and Investment Framework and action plan, and set up the Committee on Trade and Investment.

APEC economic leaders, meeting on Blake Island near Seattle on November 20, 1993, set forth a vision which recognizes that in the post-Cold War era:

We have an opportunity to build a new economic foundation for the Asia- Pacific that harnesses the energy of our diverse economies, strengthens cooperation and promotes prosperity.

The leaders also:

--Called for a successful conclusion to the Uruguay Round of the General Agreement on Tariffs and Trade;

--Called on APEC to expand its economic dialogue and advance its work program;

--Agreed to convene a meeting of APEC finance ministers;

--Asked business leaders to establish a Pacific Business Forum;

--Asked APEC to strengthen its policy dialogue on small and medium-sized business enterprises; and

--Agreed to establish an APEC Education Program and a Business Volunteer Program.

In Jakarta, Indonesia, in November 1994, APEC economic leaders reached agreement on strengthening economic cooperation within the region for the purpose of strengthening the open multilateral trading system, enhancing trade and investment liberalization in the Asia-Pacific region, and intensifying Asia-Pacific development cooperation. Leaders announced their commitment to achieve "free and open trade and investment in the Asia-Pacific." All barriers to trade and investment are to be dismantled before 2010 or 2020 by developed and developing participants, respectively.

In Osaka, Japan, in November 1995, APEC member economies adopted an Action Agenda that will serve as the template for work toward APEC's common goals. The Action Agenda serves as the blueprint for implementing free trade and investment, covers 15 broad areas for liberalization, and sets out 135 specific actions that APEC members should take to open their markets and reduce the cost of doing business. In addition, it identifies economic policy goals for broad cooperation to enhance regional integration in 13 areas, such as telecommunications, transportation, human resources development, energy, and small and medium enterprises. Individual member economies are preparing concrete and substantive Action Plans to be submitted to the 1996 APEC Ministerial Meeting in the Philippines for assessment. Overall implementation of the Action Plans will begin in January 1997 and will be reviewed annually.

Recognizing that business is the source of vitality for the Asia-Pacific and the driving force for regional economic development, APEC leaders called for the creation of the APEC Business Advisory Council (ABAC) to provide insights and counsel to APEC's work program. Each member economy has nominated three business representatives to the body. ABAC representatives are expected to meet with APEC Economic Leaders prior to the Leaders Meeting in the Philippines in November.

APEC's priority is to remove impediments to business and promote cooperative solutions to common regional problems. APEC made significant contributions to negotiations during the Uruguay Round and is considering moves toward regional trade liberalization. A primary goal is APEC's endorsement of a WTO agreement to eliminate tariffs on information technology products.

APEC Groups

APEC senior officials oversee 10 working groups, covering broad areas of economic, educational, and environmental cooperation. In addition, APEC has a Committee on Trade and Investment with customs and standards and conformance subcommittees, an Economic Committee, and a Budget and Administrative Committee. The working groups are as follows.

Trade and Investment Data. Develops consistent and reliable data in merchandise trade, trade in services, and investment.

Trade Promotion. Develops proposals to exchange trade and industrial information and to promote economic and trade missions among economies of the region. Organizes international seminars and meetings to promote trade, an Asia-Pacific trade fair, and a training course on trade promotion.

Industrial Science and Technology. Promotes economic growth by expanding technology flows and focusing on science and technology issues that network potential partners together in the Asia-Pacific region.

Human Resource Development. Seeks ways to exchange information among Asia-Pacific economies in such areas as business administration, industrial training and innovation, project management, and development planning. In this working group, the United States hosted an APEC education ministerial in Washington, DC, in August 1992 and sponsors the APEC Partnership for Education Program, which promotes university partnerships among U.S. and Asian/South Pacific universities, outreach and cooperative education activities, and private sector training.

Energy Cooperation. Develops cooperative projects, such as a regional database on energy supply and demand, and exchanges views on, among other things, coal utilization, technology transfer, and resource exploration and development.

Marine Resource Conservation. Develops policy and technical responses to wide range of marine pollution and marine environmental protection issues.

Telecommunications. Develops policy and technical measures to liberalize trade and investment policy and regulatory measures in this sector. Compiles annual survey on APEC telecommunications development activities, including a description of each member country's telecommunications environment. Explores ways to establish and develop regional networks, initially by encouraging electronic data interchange. Exchanges information on policy and regulatory developments in each member's telecommunications sector. Disseminates a manual on how to approach training in a telecommunications organization, followed by a pilot project reviewing needs and recommending solutions in a selected organization.

Transportation. Studies and recommends ways to improve infrastructure, facilitate movement of passengers and freight, collect and exchange data, and enhance transportation safety and security. This working group is one of three added in March 1991. The United States proposed it because of the importance of improved transportation links to continued economic growth in the region. In June 1995, the United States hosted an APEC transportation ministerial.

Tourism. Studies one of the region's most important industries, focusing on tourism data exchange, barriers to expansion, training programs, and current projects in APEC member economies.

Fisheries. Promotes policy and technical measures and information exchange to protect fish and marine resources, facilitate fisheries trade, and protect human health. Reports on the role of APEC in coordinating and complementing the work of existing organizations and promoting cooperative relations among APEC participants.

Participating Economies

Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, Chinese Taipei, Thailand, United States

[end of document]

November 1996

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